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Consider the following two mutually exclusive projects Year Cash Flow A Cash Flow B 0 $ 417000 $ 36000 1 48000 19600 2 58000 14100 3 75000 14600 4 532000 11400 The

Consider the following two mutually exclusive projects:

Year Cash Flow (A) Cash Flow (B)
0 –$ 417,000 –$ 36,000
1   48,000   19,600
2   58,000   14,100
3   75,000   14,600
4   532,000   11,400
 

  
The required return on these investments is 13 percent.

a. What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

  Payback period
Project A years  
Project B years  
 

b. What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
  

  Net present value
Project A $  
Project B $  
 

  
c. What is the IRR for each project? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

  Internal rate of return
Project A $  
Project B $  
 

d. What is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.)

  Profitability index
Project A    
Project B    

Apr 11 2020 View more View Less

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